The Centre for European Reform is a think-tank devoted to improving the quality of the debate on the European Union. It is a forum for people with ideas from Britain and across the continent to discuss the many political, economic and social challenges facing Europe. It seeks to work with similar bodies in other European countries, North America and elsewhere in the world.

Thursday, August 21, 2014

When member-states reconvene on August 30th in Brussels to decide on the remaining top EU posts, they should agree on candidates who not only have the right party affiliation, nationality or gender, but who can also respond to the EU’s mounting challenges. This applies to the President of the European Council, whose role is to forge a consensus among EU leaders — a difficult task these days. But the appointment of a successor to Herman Van Rompuy has so far been overshadowed by political squabbles around Federica Mogherini, the Italian foreign minister and candidate for the post of High Representative.

Many still believe that the job of the European Council president is nothing more than European ‘master of ceremonies’. This is wrong. The sovereign debt crisis elevated the European Council to the primary forum for EU discussions on economic governance. It also increased the importance of its permanent president. Van Rompuy has had his hands full ever since, trying to reconcile the divergent interests of debtor and creditor countries. The bar has been set high for Van Rompuy’s successor, who is expected to take over on December 1st. One of Van Rompuy’s last tasks will be to find a candidate able to get the European Council working as a team. Van Rompuy would do well to look in the mirror, draw up a list of his strengths and weaknesses, and seek a successor with some of his own best characteristics.

Efficient chairman. Despite a reputation for having the “charisma of a damp rag”, as Nigel Farage once put it, Van Rompuy made European Council meetings more efficient. He used concise conclusions to set out a strategic direction for the EU. The strategic agenda which EU leaders endorsed in June is a case in point. It identified priority areas which the EU should focus on in the course of the next five years. But the European Council has not always remained at the strategic level. It suggested deleting two articles from a draft regulation on the creation of unitary patent protection, despite in theory exercising no legislative powers. Not everyone liked Van Rompuy’s agenda management either. He pushed for the most sensitive and technical issues to be discussed over meals. This has been a headache for advisers, who had limited contact with their leaders at mealtimes. But trying to build consensus in the informal setting of a meal may have helped to overcome impasses, for example on the question of imposing a ‘haircut’ on holders of Greek bonds in order to reduce its debt. As there are still decisions to be made about euro governance and a settlement with the British to negotiate, a new president should keep Van Rompuy’s tactics up his or her sleeve.

Sensitive to concerns of euro ‘outs’ and ‘pre-ins’. Van Rompuy is an economist by profession, and this helped him to keep the European Council in the driving seat in discussions on the Economic and Monetary Union (EMU). Deliberations among all 28 EU leaders have limited any shift in the centre of gravity towards decision-making in the format of eurozone only. Van Rompuy, who initially gained a reputation for leaning too much towards Franco-German views, has developed a sensitivity towards the concerns of member-states that are not in the eurozone. In particular, the ‘pre-ins’ who are yet to adopt the common currency have a vital interest in long term arrangements in the eurozone. Member-states such as Poland therefore welcomed the decision to have the president of the European Council also chair euro summits as a small step towards greater transparency in the eurozone. But one might wonder if this arrangement can continue if Van Rompuy’s successor does not come from a euro ‘in’ country. It could well serve as an invitation to the French to renew their advocacy of the eurozone-only format.

Moderate on macroeconomics. The eurozone failed to register growth in the second quarter of the year and Italy slid back into recession. This will almost certainly bring the debate on ways to provide economic stimulus back to the EU leaders’ level. A new European Council president will find it very difficult to bridge divergent views on eurozone matters; anyone with strong views on either side of the stimulus debate will not get the job. The best that Van Rompuy can do is to focus on candidates who do not come from a major debtor or creditor country and are not closely associated with a particular view on macroeconomic policy.

Assertive towards the European Parliament. On paper, the European Council president should only report to the members of the European Parliament (MEPs) after EU leaders' meetings. But Van Rompuy understood the importance of nurturing relations with MEPs, who together with the EU Council exercise EU legislative powers. Yet he avoided setting any precedents which might give them even more power. He firmly resisted calls by the President of the European Parliament, Martin Schulz, for a seat at the European Council. Now that the European Council, by endorsing Jean-Claude Juncker as Commission president, has effectively accepted the Spitzenkandidaten process, the European Parliament is hungry for more influence. The European Council, and its deliberations on EU economic governance, is next on the menu. But the Parliament has its own legitimacy problem: fewer and fewer people vote, and support for Eurosceptic movements is on the rise. It is a bad time for the Parliament to demand more power. The next European Council president should, like Van Rompuy, keep the MEPs at arm’s length. Instead, he or she should champion a debate on how to plug national parliaments better into EU policy-making.

Good mediator with a small ego. Van Rompuy proved to be an efficient honest broker. In 2013 he managed to reconcile the interests of net contributors to and beneficiaries of the EU budget, and strike a fair deal on the long-term financing of the Union. But seeking consensus among EU leaders is a difficult balancing act, even for a president who is held in high regard and who has the ability to keep personal ambitions in check. The European Council in December 2011 illustrates it. Ultimately, Van Rompuy could not prevent David Cameron, the British prime minister, from vetoing a revision of the EU treaties to introduce stricter discipline on member-states’ budgets. Cameron arrived in Brussels with a wish list, on which he would not compromise. Van Rompuy's successor will have to deal with failures he cannot be blamed for and broker deals without claiming credit for them.

Critical but understanding of the British. If Van Rompuy were asked what made his job particularly challenging, he would probably point to the ‘British question’. In his Bloomberg speech in January 2013, David Cameron announced a radical redefinition of the UK’s relationship with the EU. Should the UK seek a renegotiation of its membership after the next general election, in May 2015, the European Council will be the primary forum for deciding whether to revise the EU treaties and consider Cameron’s wish list of reforms. The contenders for Van Rompuy’s job should have a good understanding of the dynamics of Britain’s engagement with Europe, and where to look for common ground with other member-states.

Finding a candidate that matches this profile will not be easy. It will be even harder because of competing demands for ‘balance’. The European Council will be expected to give one of the two top jobs to a representative of the Party of European Socialists (since Juncker is from the centre-right European People’s Party). The centrist Alliance of Liberals and Democrats for Europe, despite losses in the May elections, would like a reward for their pivotal role in the EU legislative process. There will be criticism if none of the top posts goes to a woman. And Van Rompuy will also have to deal with the insistence of the Central European countries that they are no longer junior partners and should hold one of the top posts. The EU, beset by crises, has no time to train a novice, so Van Rompuy’s successor should ideally be a current or former European Council member.

Names that would fit most of the criteria and are probably on Van Rompuy’s list already include Donald Tusk (Poland), Helle Thorning-Schmidt (Denmark), Valdis Dombrovskis (former Latvian prime minister) and Andrus Ansip (former Estonian prime minister). Dombrovskis and Ansip have now been nominated by their countries to be Commissioners. This does not rule out the possibility that one of them could emerge as a late compromise candidate, but it suggests that the Latvian and Estonian governments do not expect them to be chosen.

That would leave Tusk and Thorning-Schmidt. The fact that neither comes from a euro ‘in’ country counts against them. Some member-states may fear that it would be harder for them to insist on keeping the eurozone discussions at the level of the 28 rather than the 18. These concerns are not shared in London. And David Cameron feels that Thorning-Schmidt would be more responsive to British concerns than Tusk.

Tusk’s advantage is that Poland is committed to adopt the euro in the future, whereas Denmark has a permanent opt-out. His appointment would also recognise Poland’s rapid economic and political progress since joining the EU. Tusk enjoys friendly relations with Angela Merkel. On the other hand, the German chancellor values him as a reliable counterpart in neighbouring Poland, and as such she may prefer that Tusk stays at home for now. Merkel also wants to keep the UK in the EU. She will support a candidate who can best tick the ‘British question’ box. These two points tip the balance towards the Danish candidate.

If Denmark’s euro ‘out’ status makes Thorning-Schmidt unacceptable to some member-states, Van Rompuy should be ready to twist some more arms, like that of Enda Kenny, the Irish taoiseach. He comes from a euro ‘in’ country, and enjoys good relations with the British. Ireland has completed the financial assistance programme and has a liberal economic outlook, but needs policies that will boost growth. This may make Kenny acceptable to both the southern and northern blocs.

One final complication for Van Rompuy: he will have to secure unanimous support for his successor. The EU treaties allow a vote on the European Council president, but leaders will probably resist this way of breaking the impasse. A lack of unity would damage contenders’ credibility at home and in Brussels, a risk that active politicians are unwilling to take. So brokering a consensus among the 28 over his successor is likely to be the final and biggest test for Van Rompuy’s conciliation skills.

Agata Gostyńska is a research fellow at the Centre for European Reform.

Monday, August 11, 2014

The UK can only achieve serious reform if it is serious about
leaving, and it can only be serious about leaving if it believes this is
better than the status quo of staying in an unreformed EU. It is.

– Gerard Lyons, ‘The Europe report: A win-win situation’

In recent years, policy wonks have led a campaign championing
‘evidence-based policy making’. A new policy should only be put in place
after it has been rigorously weighed against the evidence. If the
evidence points in another direction, the policy should be ditched.
This, of course, rarely happens: politicians have a pet project that
they are convinced must be a good idea, and commission research that
supports the project and ignores evidence to the contrary. British civil
servants have come to call this ‘policy-based evidence making’. Nowhere
is it more apparent than in Britain’s Europe debate: pro-Europeans and
eurosceptics too easily throw around spurious GDP and jobs figures,
often with weak or cherry-picked evidence, to support their case.

The Mayor of London, Boris Johnson, is the latest culprit. He has
ambitions to lead the British Conservative party, and on Wednesday, he
made a speech laying out his preferred reforms to the EU. Although he
was careful not to say it explicitly, the thrust of Johnson’s speech was
that Britain would be better off leaving than staying in an unreformed
EU. Such a stance would help him win a leadership contest, given
growing euroscepticism among Conservative MPs.

However, “if we get the reforms,” Johnson said, “then I would frankly be
happy to campaign for a yes to stay in”. He pointed to research
published on the same day as the speech by his economic advisor, Gerard
Lyons. The research considered the impact of EU withdrawal on London’s
economy, and provided four costed scenarios:

Stay in a reformed EU, which Lyons thinks would cause London’s
economy to grow by 2.75 per cent a year, to £640 billion in 20 years.

Leave the EU but with “goodwill” on both sides, and with the UK
pursuing a “pro-growth, reform agenda”. This would cause London’s
economy to grow by 2.5 per cent a year, to £615 billion in 2034.

Stay in an unreformed EU, with growth of 1.9 per cent a year and an economy of £495 billion in 20 years.

Leave the EU but pursue autarkic trade and subsidy policies, with 1.4 per cent growth leading to GDP of £430 billion.

Johnson and Lyons think that London, and by extension the UK, would be
best off in a reformed EU, but that leaving would be better than staying
in the status quo. These figures, at first sight, seem implausible.
Lyons argues that EU reforms could raise London’s growth rate by 45 per
cent, and that the status quo is only slightly better than leaving the
EU and pursuing autarkic trade policies.

What are the reforms that would lead to such impressive improvements in
London’s growth rate? These were Boris Johnson’s suggestions: “complete
the single market”; reform social and employment law to reduce costs to
businesses; further reform of, or better, abolition of the Common
Agricultural Policy (CAP); “managed migration so that we know how many people
are coming in”; a yellow card procedure so that national parliaments can
stop “unnecessary” regulations; and an “end to the pointless attacks on
the City of London”.

Consider whether these reforms, some of which the CER would support, are
likely to promote the rates of economic growth that Johnson and Lyons
suggest.

The UK Department of Business, Innovation and Skills (BIS) estimates
that completing the single market – by which BIS means a highly
ambitious elimination of barriers to the trade in services – would boost British GDP by 7 per cent. If we spread that out over 20 years, that amounts to 0.35 per cent a year.

The CER Commission’s report on leaving the EU
showed that EU social and employment rules do not prevent Britain from
having one of the most flexible labour markets in the developed world;
and that the negative impact of totemic rules like the Working Time
Directive is small. There is little reason to believe that abolishing
these rules upon EU withdrawal would have a large macroeconomic impact.

An abolition of the CAP would make little difference to London’s
economy, since it has no farms that receive subsidies. A reduction of EU
tariffs on agricultural products, on the other hand, might raise
incomes by reducing Londoners’ shopping bills, but Johnson did not
mention this.

Counting immigrants from the rest of the EU would make no
difference to the number who came. And, in any case, immigration raises
GDP, rather than lowering it.

It is not possible to know whether greater use of a yellow card
procedure – which is already in operation – would raise or lower GDP.
More yellow cards might make services liberalisation more difficult,
since national parliaments would have more power to thwart the European
Commission’s efforts to open national markets.

It is not apparent that the “pointless attacks” on the City of
London have had a severe impact on London’s GDP. Rather, the main reason
that UK banks’ regulatory costs have risen in recent years is due to
domestic, not EU rules: the UK has been faster than other EU countries
to raise capital, leverage and liquidity requirements.

A detailed and fair-minded appraisal of the macroeconomic consequences of these reforms might undermine the entire argument, and they are not available to the reader of Lyons’s report. The economic forecasts were provided by the Volterra consultancy, but the appendix does not tell the reader the method by which Volterra arrived at their figures. It simply says that “a reformed EU would, for example, offer free trade in services on the basis of passported regulation”, meaning a services market in which any supplier in the EU can provide services in another member-state without meeting its regulations. A free-trading Britain outside the EU “would encourage trade in services across the globe”. Their model, on the other hand, of an unreformed EU is one whose “prospects … are restricted on the supply side”. Then the report simply lists the GDP and employment numbers that Volterra has attached to these unspecific assumptions without explaining the model the consultancy used.

The report offers very little analysis of what might happen to the UK economy if it left the EU. Foreign direct investment (FDI), which the National Institute of Economic and Social Research has rightly pointed out is the constituent of GDP that is most at risk from an EU exit, receives one mention. Lyons acknowledges that Britain attracts more FDI than any other member-state, and cites a CityUK survey where 38 per cent of financial and professional services bosses said they would move some of their business outside London if Britain left. But Lyons dismisses their concerns, saying this “mirrors comments made by City leaders on the effect of the UK not joining the euro.” A fuller discussion is warranted. It is true that Britain’s decision to stay out of the euro did not prompt international banks to move operations out of the City. But Britain’s EU membership is one reason why: single market rules have allowed the City to be the eurozone’s wholesale banking centre. And higher trade barriers arising from an EU exit would be likely to reduce FDI in many sectors of the economy: market size is an important determinant of FDI flows, and Britain outside the EU would have less access to the single market, unless it pursued the ‘Norwegian option’ of joining the European Economic Area.

The discussion of the possible post-exit trade agreements is very brief: a page and a half. The Norwegian, Swiss and Turkish options are rightly dismissed as politically unworkable (all would require the UK to sign up to rules or trade agreements with little say over them). Lyons says that “the UK option” would be better. This would be a “comprehensive free trade agreement”. But it is hard to see how this option would lead to the kinds of growth rates he suggests. He thinks that the City would have less access to EU services markets than it has now. “It is unlikely [full access] will be granted”, and “it is not optimal” to lose full services market access, he says. And he does not believe that many EU rules would cease to operate in Britain – rules which he argues elsewhere in the report are severe constraints on British economic growth. While UK business “would decide to mirror EU regulations on products and services to allow ease of selling into the [EU] market”, he writes, these “would be business decisions, not something imposed by a centralised bureaucracy”. The report does say that Britain could repeal social and employment law. But it is hard to see how this would result in the growth that the report forecasts.

It is not ungenerous to say that the report’s headline figures were designed to lead to the conclusion that the current state of Conservative politics dictates: that staying in a reformed EU would be best; that leaving would be fine; and that the status quo is so bad that it is only marginally better than leaving the EU and erecting barriers to foreign competition. These are implausible claims that require some serious empirical backing to be convincing. The report does not even try.

John Springford is a senior research fellow at the Centre for European Reform.

Friday, August 08, 2014

It has been a bad few days for Vladimir Putin. That makes it a particularly dangerous time for Ukraine and for the rest of Europe. The EU has imposed more sanctions on the Russian economy, Moscow has retaliated with an agricultural boycott and Russia appears ready to escalate the crisis: Russian troops are amassing on the Ukrainian border. The West needs to be clear about what it wants from Moscow and take international legal measures against Russia to pursue its objectives. It should also do more to help Ukraine defend its borders. But for the moment Western leaders should put aside the megaphone (particularly when the accompanying stick is disproportionately small) and pick up the telephone to the Kremlin.

The KGB reflexes of Putin and those around him will see a Western conspiracy in recent events. The reality is that two important court cases coincidentally finished within days of each other, both of which went against Russia; and the shooting down of Malaysian Airlines flight MH17 on July 17th, which no one could have predicted, left the EU and US little choice but to impose tougher measures.

Since spring, the EU had been threatening so-called ‘tier three’ sanctions on whole sectors of the Russian economy, while changing its mind about what would trigger them. In the aftermath of the attack on the airliner and Russia’s inadequate response, the EU finally moved. On their own, the new sanctions on some financial transactions, defence trade, and transfer of energy-related technology are still at the lower end of what could be done. But they will put additional pressure on Russia's economy which is falling into recession. There are indications that – as the EU had hoped – fear of the impact of sanctions has started to cause splits in Putin’s circle, between the ex-KGB personnel and those with the largest financial interests.

Russia has retaliated with a boycott of Western agricultural imports, but it remains to be seen how effective these are at weakening Europe’s growing resolve. If Europe’s initial ‘tier three’ sanctions are not sufficient to change Putin’s mind, the EU should consider expanding their scope to include, for instance, the purchase of Russian oil. Moreover, European member-states should discourage France from delivering two ‘Mistral’ warships to Russia. Paris has said it will deliver the first, but may suspend delivery of the second ship, depending on Putin’s actions. To increase pressure on France, other EU member-states should set the right example, as did Germany when it decided on August 4th to cancel a defence deal with Russia. So far, EU sanctions have not been retroactive; existing defence deals or City contracts are not affected. EU leaders should re-consider this.

Potentially at least as important is the judgement of the Permanent Court of Arbitration in The Hague in favour of a group of former shareholders in the Russian oil company, Yukos. Yukos was once Russia’s largest private company until the Russian government drove it into bankruptcy and transferred its assets to state-owned Rosneft as part of Putin’s trial of strength with Yukos’s former owner, the oligarch Mikhail Khodorkovsky. On July 18th, the court issued a damning commentary on the Russian government’s business practices, and ordered it to pay more than $50 billion – about 2.5 per cent of Russia’s GDP – in compensation to the former shareholders. In an unrelated case, on July 31st, the European Court of Human Rights, which had already found in 2011 that Russia had violated Yukos’s right to a fair trial and protection of property, awarded another group of former Yukos shareholders €1.9 billion – the largest amount ever awarded in a human rights case.

The significance of the arbitration case is that if Russia refuses to pay up within 180 days (which is almost certain), the shareholders can ask foreign courts to seize Russian state-owned assets. This is because 150 countries (including Russia itself) are parties to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and therefore bound to enforce such judgements. Sovereign property, such as embassy buildings or naval vessels, is exempt from seizure, but property used for commercial purposes by state-owned companies is not. Given the extent to which the Russian government still owns or controls the economy, there will be plenty of targets; cases could go on for many years, and have a chilling effect on potential investors in Russia.

International legal mechanisms are the best weapons the EU has to deal with a state where the rule of law is weak; it should use them effectively. That will not be simple: member-states are sometimes slow or fickle when implementing EU sanctions legislation (inconsistent application of the anti-money laundering directives being a clear example). The Commission and other member-states need to do more to lean on countries that would rather profit from Russian misbehaviour than prevent it.

Where the Commission has power, it should be forceful in exercising it. This is particularly true in relation to trade and energy. Russia has begun to retaliate against EU sanctions by blocking exports of agricultural produce from European countries on spurious health grounds – a familiar tactic. The Commission should make full use of the World Trade Organisation (WTO) dispute settlement mechanism. This can be a slow process, but using it consistently whenever Russia violates its WTO obligations is the best way to put political and economic pressure on Russia to abide by the rules.

In the energy field, the Commission opened an anti-trust case against Gazprom in 2012. It sought to force the Russian gas company to divide its European pipeline business from its gas production business and let third-party gas suppliers have access to the pipeline; to allow the re-export of gas supplied by Gazprom; and to deal with unjustifiably high gas prices in countries (particularly in Central Europe) where Gazprom is a monopoly or near-monopoly supplier. The case should not be postponed until the next Commission takes office in the autumn. The Commission should also keep the pressure on the six member-states plus Serbia who are involved in the South Stream project (which would bring Russian gas to South Eastern Europe, bypassing Ukraine) to ensure that their contracts with Gazprom comply with EU competition law and regulations. In December 2013, the Commission found that all the contracts helped Gazprom to maintain its anti-competitive practices. If the Commission can force Gazprom to change its practices, it could have a major impact on both energy prices and energy security, particularly in Central and Eastern Europe. So far, Bulgaria has suspended work on South Stream as a result of the Commission's action; but Austria and Hungary are pressing on.

Beyond looking for ways to bring Russia into line with international rules, the EU needs to step up its support for Ukraine. Ukraine’s armed forces have made significant progress in taking back territory in the east, but they still do not control the whole length of the border with Russia. There is plenty of evidence, including from careless social media posts by Russian soldiers, that Russian troops are on the Ukrainian side of the border and that Russian forces are shelling Ukrainian positions from inside Russia. Like the annexation of Crimea, these are grave breaches of international law, and the EU should give Ukraine political support if, as then-foreign minister Andriy Deshchytsia said in April, it takes Russia to the International Court of Justice. But the EU and the member-states should also consider what practical help they can give Ukraine to secure the border. The US has announced that it will supply engineering vehicles, transport and surveillance equipment for the border guards; the EU should take similar steps.

In June, EU foreign ministers agreed on the contours of a possible civilian mission to give Ukraine support on rule of law issues such as policing and the administration of justice. The EU should also discuss with the Ukrainian government whether military training would be beneficial. The performance of the Ukrainian army and national guard has improved considerably since Russian irregular forces first appeared on the Ukrainian mainland in March, but unless Russia stops arming, training and supporting rebel forces, the Ukrainians will find themselves at a disadvantage again. Ukraine is a sovereign state on Europe’s borders; the EU has every interest in ensuring that Kyiv can defend its territory.

At the same time, although the Ukrainian government has denied it, there is evidence that its forces have used artillery and the 'Grad' missile system, designed for use against concentrations of forces in open ground, against populated areas including the city of Donetsk. International human rights organisations have rightly been critical of this, but it is not clear that the Ukrainians have either the equipment or the training needed to clear rebel forces out of towns in any other way. The West should offer Ukraine alternatives to stop it from using inaccurate and indiscriminate weapons like 'Grad' in circumstances for which they were not designed. It would also remove a possible pretext for Putin to intervene in Ukraine on humanitarian grounds.

So far, Putin’s response to pressure (in the form of sanctions) and conciliation (such as the April 17th agreement brokered by the US and EU with Russia and Ukraine) has been to escalate. He is almost certainly more willing to accept the risk of full-scale conflict over Ukraine than any Western leader. But he is also more likely to miscalculate and cause a larger scale conflict in Europe if he is isolated – if Western leaders stop talking to him, and address him only through public statements.

There should be a moratorium on declarations of what Russia ‘must’ do. Instead, Western leaders should step up their personal contacts with Putin, however unproductive these may seem. An interesting piece of research by Jason Karaian of 'Quartz' shows that since February this year Putin has spoken to Angela Merkel more than 30 times; François Hollande 15 times, while Barack Obama and David Cameron have only spoken to him eight and seven times respectively. But now is the moment to pick up the phone and try to talk him out of taking any rash steps.

Without giving any ground on key international principles, or offering deals about Ukraine without Ukrainian approval, Western leaders should start to talk to Putin relentlessly, as often as he will take their calls, challenging his narrative. If he claims that Ukrainian forces are committing atrocities against Russian speakers, he should be asked to provide proof, or confronted with the contrary information from human rights monitors. If he denies that Russian forces are firing into Ukraine, he should be presented with the data to show the opposite. If the West knows that Russian armaments have crossed the border into Ukraine, the evidence should be laid out for him personally. Consistent efforts by European leaders to communicate with Putin are even more important now that the threat of a Russian military invasion in eastern Ukraine has increased.

Given the extent of the information war being waged by Russia's state-owned media, Western public broadcasters should also do whatever they can to provide for the Russian population an accurate, non-polemical account of what is happening in their neighbouring country.

It may be impossible to penetrate the information bubble around Putin – he may indeed have begun to believe the same propaganda that is shown on the Russian media. But if it is possible to set out an alternative version of what is happening, that might also give Putin the chance, if handled carefully, to use the traditional Russian myth of the good Tsar and the bad 'boyars' (nobles), and to blame his subordinates for freelancing.

Winston Churchill was certainly not afraid of a fight, but even he said that “jaw-jaw is better than war-war”. No one in the West wants to risk war with Russia. But in that case, the EU and the US need to put even more effort into influencing Putin’s decisions through international law and constant dialogue.

Ian Bond is director of foreign policy at the Centre for European Reform.